Question

The probability of the stock market going up in a single day is 51%. What is the probability that the market will go up 4 consecutive days?

Answer 1

Answer:

$Probability = 0.068$

Step-by-step explanation:

Let P(S) represent the probability that stock market will go up in a day

Given

$P(S) = 51\%$

Required

Determine the probability that stock will go up 4 consecutive days

Start by converting P(S) from percentage to decimal

$P(S) = 51\%$

$P(S) = \frac{51}{100}$

$P(S) = 0.51$

The above expression represents the probability in a day;

For 4 days; we have:

$Probability = P(S) * P(S) * P(S) * P(S)$

$Probability = (P(S))^4$

Substitute 0.51 for P(S)

$Probability = (0.51)^4$

$Probability = 0.06765201$

$Probability = 0.068$ -- Approximated

Hence, the probability that stock will rise for 4 consecutive days is 0.068